Chaos Erupts Overseas

Equities start the day higher as chaos erupts overseas. After yesterday’s Bears debacle, I picked myself up off the floor and went online to see what was going on around the globe. Can you believe that? I went to news websites to cheer myself up...NEWS WEBSITES! As I hit my favorite “the world is blowing up” source this was the first picture I saw.  As I marveled at the crowd I thought to myself.. “wow, that iPhone sure is popular in China.” Little did I know the people of Hong Kong were upset with their leaders in Beijing and planned to protest across the entire freaking city (from what I understand the protest spans the equivalent of Central Park to Flatiron. And if I lived in NY I might actually know what that means). You know what’s bad for stocks?  Protests. You know what’s really bad for stocks?  China rolling tanks thru the middle of Central and wiping out a bunch of their citizens, so let’s pray that doesn’t happen. Equities are struggling of late but let’s keep things in perspective shall we? Look, I think the tape is as funky as my son’s socks after a day of soccer but I need to see a prolonged period of weakness before starting to worry. Ups and Downs…they happen…just have a plan and stick to it. Change your thesis when the market has more than a few days of negative numbers and isn’t sitting a couple % from the all-time high.  By the way, they say there are two certainties in life: death and taxes. Jay Cutler vs the Packers should be added to that list (h/t Nick!)

After the open it looked like we would have a slaughterhouse of Horrors all day long. The first print was down 1% and my entire blotter was sell orders. I buckled up for one of those days where you can’t look at your PA and you tell your wife to cancel the Target run because you can live without Extra Soft Downy. But, as you know, markets like to punish people over their skis so it immediately rallied. We hate stocks, we don’t hate stocks, we are scared of overseas turmoil, we aren’t scared of overseas turmoil, I mean who knows right?  By lunch we sat on 1,976, down 33bps. 

The rest of the day was spent grinding around the same area we were during lunch and by the time the bell rang we landed on 1,997, down 0.25%. Ugly start, decent middle, mediocre ending. Keep your eyes on Hong Kong and the credit markets because stocks don’t know what to do here. For what it’s worth, the S&P did end back above its 50 day but that could evaporate quickly if things go south. Do I think it’s the start of a correction? No, but I’d change my mind if credit continues to act weak. We’ll see though..at least we have some volatility back? 

Final Score:  Dow -25bps, S&P500 -25bps, Nasdq -16bps, Rus2k -13bps.

News Highlights:

For my real end link we are going with my favorite pastime…skiing!   Are you ready for this because it’s coming baby. 

http://youtu.be/aOtHgDXhgyE

Have a good night.